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Posted on: April 30, 2020

City discusses budget gaps due to COVID-19

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City leaders will hold a budget workshop with the City Commission on May 7 to discuss a tough budget situation caused by the COVID-19 pandemic.

Leaders have calculated an estimated $839,178 of expenditures over revenue in the current budget year, and an estimated $4.9 million of expenditures over revenue for the next budget year. City budget years run July 1 to June 30.

These revenue gaps are expected because of less sales tax collected, reducing state revenue sharing to local governments; less gas and weight tax; and a substantial loss of city income taxes, due to the fact that unemployment and those telecommuting from homes outside the city are not subject to city income tax. These in combination total an estimated 20 percent reduction in the city’s income tax revenue, or about $3.4 million.

Income taxes total more than 30 percent of the city’s general fund revenue. The general fund supports most of the operating expenses of the city, with the greatest amount in salaries and benefits for city employees.

These budget gaps also resulted in city furloughing 95 employees for the month of May and, for some, part of June. Leaders will evaluate the need to continue furloughs on a month-to-month basis, but this may be extended through July. In addition, the city manager, assistant city manager, city attorney, and 27 department heads and division managers will take a 3 percent salary reduction for May, June, and July.

“I feel grateful for our entire team’s service and professionalism,” said City Manager Rebecca Fleury. “There is no question that these are tough decisions, and we will continue discussing these issues for the foreseeable future as Battle Creek, and communities across the country, continue serving our communities during the challenges the pandemic presents.”

City leaders also will communicate to state and federal elected officials Battle Creek’s need for aid, for relief from these anticipated lost revenues.

The City of Battle Creek is committed to providing our community with essential services like drinking water, waste water treatment, and police and fire services. However, the impacts of the COVID-19 pandemic and the resulting lower revenues will have consequences across the city organization. Please see the accompanying document for more detail.

The community can participate in the Battle Creek City Commission budget workshop starting at 6 p.m. next Thursday, May 7. The meeting will take place remotely, with live broadcast on AccessVision cable channels, via Live 17 at accessvision.tv, and on the city’s Facebook page, facebook.com/cerealcitymichigan.

To offer public comment during the workshop, call into the meeting at 312-626-6799. Enter meeting ID 949-6210-1499, and you will placed in a virtual waiting room until it is your turn to speak. You can email public comments to City Clerk Victoria Houser at vlhouser@battlecreekmi.gov, or by placing written comments, addressed to the City Commission, in the payment drop box in the parking lot of City Hall by noon on May 7.

City facilities remain closed to the public at least through May 15, in line with the governor’s Stay Home, Stay Safe order. Unless that order is extended, City Hall will open to the public on May 18, with essential staff only, and leaders anticipate requiring medical screenings for both staff and visitors. This, and the reopening of other facilities, will be outlined in a phased plan that leaders are still developing.

City of Battle Creek COVID-19 budget story
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